So you’re on the path to financial independence, and you’re wondering what details to share with your family.

Your connections with family members are different than friends or co-workers. They probably forgive you for things that friends might not. But they might also expect more in return. And, as we all know, family is forever.

So it’s important to make firm decisions about how open to be regarding your own financial independence. Given a situation, everyone has their own opinion and course of action that works for them: there’s no one-size-fits-all answer. For example, I’m not going to be completely honest with my employer regarding my reasons for leaving, preferring to withhold the RE details, but Brave New Life revealed all on his way out. Even though our decisions are different, we’re each making the choice that works best for us given our respective personalities and circumstances.

Considerations

Revealing major life goals with other people has the potential to significantly change your relationship with them — maybe for better, maybe for worse.

If you tell a friend and things get incredibly awkward, there’s always the last-resort-option of terminating the friendship. But if you tell a family member and something similar happens, you’re in a pickle. Your brother is going to remain your brother for your entire life, and chances are good you’ll want a working relationship in one form or another.

In many families, there are no secrets. Asking one person to keep some information on the down low is, in many cases, setting them up for failure. Telling your chatty mom you’re retiring is probably the same as telling everyone, no matter how much she assures you otherwise.

Some families are full of well-off professionals — doctors, lawyers, engineers — while others might trend the other way, consisting of people with a history of debt, employment problems, or worse. The makeup of your family matters a great deal here.

If you are at the point of actually retiring early (i.e. quitting your formal 9-5 job), will your parents be worried about you? Are they the type to ask you how you are possibly going to fill those hours, and get concerned about your ability to make ends meet, and are you comfortable having these conversations with them?

It’s generally considered to be rude to talk about net worth and finances. Is your family an exception?

Negative Consequences

If you have family members who are not well-off financially it is likely that they will be hurt that you’re not “helping them out.” Why wouldn’t you want to pick up poor old grandma’s cable bill, seeing as how you’re all set in life? What kind of horrible monster wouldn’t help out gram-grams?

Even if they don’t actively ask for funds, expectations may change. For example, when you eat a meal at a restaurant, they may wait for you to pick up the whole tab instead of immediately doing the math to split it. And they may be disappointed when you don’t.

Many people equate retirement with being rich. Do you want people in your family to think you’re loaded? You’re now living off of a modest amount of passively generated income, with set budgets and restrictions. Will they understand this?

Do you want to be viewed as your family’s personal bank? People may come to you for loans and other monetary emergencies if they know you’re doing very well. Be prepared to deal with this.

Positive Consequences

Your relationship with family will be more honest and open. You won’t feel as though you’re keeping anything from them.

Some people may ask for techniques and tips to improve their own lives financially, giving you the opportunity to help them help themselves. This is, incidentally, the number one reason that most people want to divulge their financial health. It isn’t to brag or bloat your ego — it’s to say “Look, I did this, and you can do it too.” The sharing comes out of a desire to improve the lives of others — in this case, of people that you care very deeply about.

Revealing details about your stash or plans for RE could stop parents from worrying about you financially.

I’ll say it: Maybe you just want to gloat. If that’s your drive, own it and enjoy the ride.

Telling Them Anyway

By this time you have a good handle on whether you should be telling your family. I personally think that for most people, it’s better to err on the side of caution and keep things to yourself. This is a slippery cat to get back in the bag once it’s been let out.

But still, you might tell them anyways, because hey, they’re your fracking family and you’re just not comfortable keeping the FI part of you a secret forever.

In this case, consider having a more detailed conversation with them to set expectations. Explain up front that just because you’re retiring super early doesn’t mean you have money to spare. Go over your financial model — particularly the fact that the entire structure is built on a plan of predictable, low spending and you got to the place you are in by virtue of an extremely high savings rate. Tell Dad that you’re going to be plenty busy without work, that you’ll still be exercising and volunteering and flexing your skills in other ways. Assure your sister that if she’s literally on death’s door that yes, you, M. Moneybags, will open your wallet and save her.

Probably.

Personal Story Time

My family is, as a rule, poor, and they make bad financial decisions. Stating this fact makes it sound as though I don’t love them, which couldn’t be further from the truth. But love and money don’t mix.

Early in my career, I made the mistake of revealing my income — about 70K in 2000. Let’s call that Mistake #1.

My sister asked me for money to fund a trip to Europe. I gave her two thousand dollars. Mistake #2.

My out of work brother asked me for money to cover rent just until he could get his feet back under him. I started floating him $400 a month. Mistake #3.

My mother started to need extra money for home repairs. A broken furnace. Sagging gutters. Never mind the fact that she was eating out a lot and buying antiques at consignment shops. I supported her home repairs and even found myself saying yes to requests for personal entertainment, tickets to performers, trips to New York to see her sister. Mistakes 4, 5, and 6.

The first month or two of granting these favors, my family was extremely grateful. It made me feel terrific to be helping out in this way. But it turns quickly. Something that’s special the first month becomes just okay the second month and by the third, those generous acts are now taken for granted. Your family becomes hedonically adapted to the change.

Six months into all of this, I realized I couldn’t do it anymore. I grew bitter about the new obligations. When I cut it all off, I was met with first bewilderment (don’t you love me?) then anger (what do you need that money for anyway? I supported you for 18 years and you can’t give a little back now?) with some denial thrown in for good measure. (What about a loan? I’ll pay you back in a few months!)

It was a mess, but I held my ground. It took years of standing tall and continually repeating myself in order to get my family’s expectations back in line. Five years later I got the last request for money from a family member, a plea from my sister to give her three thousand dollars for reiki massage training. I denied it the way I had denied everyone for years. No now and No forever. Stop asking.

I had to do the Right Thing — denying money to my family — hundreds of times over half a decade to correct the six measly mistakes I made in just a few months. My mother clung to her idea of me as her personal vault so stubbornly that I resorted to telling her I was in bad investment debt. Debt was something she understood, and she stopped pressuring me so much.

These experiences have made one thing very clear to me: when I quit my job, I can’t say a word to them about it. They’ve left me with no choice but to conceal the truth. As far as they know I’m still working. After all, they really have no way of knowing that I’m not. This way, we’re all still a functioning happy family with a few secrets thrown in the mix.

Works for me. Might not work for you. Everyone’s family is different. Everyone’s family is not like mine.

Thank God.

Geeking it up

Fact: The dynamics of your relationships change when you start telling secrets.

Take Star Wars. There’s a movie with a ton of secrets.

When Luke found out that Vader was his father, he no longer wanted to fight him — a big problem for the Rebellion and the forces of Good.

When Han found out that Leia was royalty, he wanted a ton of money from her. Because, Princesses have cash and rogue pirates tend to like that sort of thing.

And when Leia found out that Luke was her brother… Well, let’s just say there would be no more making out in their future.

Incestuous Kisses of Ignorance: The Best Kind?

So examine your circumstances carefully before having these conversations. Poke around your motives for sharing.

Is it for your own good or theirs? What’s driving you to want to tell them? Try to project the outcome. Imagine a future where you tell one person in confidence but the trust is broken and then everyone knows — what will happen?

Think it through carefully, and be prepared for the consequences. There will be change coming, and not all change is good.

11 Responses to Family and FI

My family knows our goals, but we’re so far off from actually reaching them that I think they’re skeptical we will actually pull it off. They do profess excitement, but no interest in pursuing it themselves.

Hey, at least you can talk about it with them, and it sounds like they generally support your plans — that’s terrific! I am considering taking another run at my brother who has matured quite a bit over the last 5-6 years, but my main concern is that he’ll say something to my mom which will in turn re-open a can of worms that was very difficult to close. It would be so much easier if he said “Hey, I found this site, mrmoneymustache, and I’m really into that right now.” (I can dream, can’t I?) Anyways, until then, I talk about FI with my wife, a few of my close friends, and folks on forums.

As far as sharing my goals with family… my mother and sister know the basics. My mother is already retired (early) and has a great pension and told me recently that she hasn’t even touched her investments since social security and her pension cover her living expenses and she can’t even spend all of that, so I’ll never have to worry about her tapping me for funds. I do have to worry about how she shares my information, as she tends to be bad about gossip, so that’s why it’s just an “in general” and not details.

My sister is a horrible spendthrift that has never held a real job for longer than a year, and has spent the last decade living off of school loans (while she and her husband did not attend school), borrowing from our parents and finally, she’s burning through her inheritance from our father. I think someday in the not too distant future once sister has blown what would amount to a small fortune on being lazy and stupid, I’ll be getting a call from her because she is in desperate straights… and I’m still not sure how I’ll handle it.

None of my friends know anything. I only have the husband and anoyomus FI boards to discuss, and I still get a bit worried sometimes that I put too much info out there. It does suck not being able to talk to people sometimes.

Thanks for the note on the misspell. This is a sign that I have to do more reading and less movie watching — might be time to back and read the Thrawn trilogy.

Your mom is in a similar position to my father who recently retired after a long working career with a decent retirement fund plus pension. Here’s the weird part — even though my parents are divorced, they still talk to one another from time to time and shoot the breeze. So if I don’t want the moms to know, I can’t even tell my dad. Oh well.

Your sis reminds me a little of my brother from 5 years ago. Lots of student loans — he used school for years as a way to avoid working. Eventually he found employment, though, and has gotten more stable. Hopefully your sister will come around, and maybe there’s an opportunity for you to help her see how to manage things differently in life. It sounds like a tough situation, though.

Thankfully I’ll still be ‘working’ once I retire, as an independent trader. This way people still think I have a job, even though it’s a weird one that is not socially acceptable outside of Wall St or Chicago pits. I can always give the excuse that I don’t have a bunch of extra money…it’s all invested in the trading business…

Years ago I took to heart something that Dave Ramsey said. He might give someone money, but he will never loan someone money. That way it’s always a gift and won’t destroy the relationship. Obviously, you don’t want to throw good money after bad. I think what he was referring to was helping someone start a business, pay for education, emergency medical expenses etc.

I’ve come to the conclusion that my mother in law is hell bent on never having a retirement fund and is addicted to spending money. Once she is physically unable to work, she’s gonna come looking to us to help her out. It’s going to be a difficult decision. I learned growing up that you don’t put your parents in a nursing home, you move them in with you and take care of them because that’s what love is. But no amount of money will ever be enough for my MIL, and taking her into our home is going to be a severe financial burden. Not to mention, she’d drive us crazy. The correct financial thing to do is to let Medicaid take over her assets and they will pay for a nursing home. But my wife loves her, and would never kick her to the curb. It will be interesting to see how it all works out, for sure.

So yeah, I completely agree with Ramsey’s advice in this area. I wish I had become more financially savvy at a younger age. It’s sort of a strange thing that personal finance isn’t taught in most public high schools or colleges. You graduate, get a job, and suddenly have all of this life-changing money in the form of a steady paycheck, but absolutely no idea what to do with it. The implicit message provided by our culture is: spend it. But there’s so much more to it, as you mentioned — investing, saving, thinking about whether or not it’s appropriate to loan or give people money, etc. What ends up happening is that people learn about personal finance through their own initiative. And the vast majority of people don’t automatically guide themselves to learn about it, for any number of reasons.
Sorry about your mom-in-law. I know exactly how you feel — this sense of impending dread and inevitability about the future that you clearly see becoming reality. I’m sure you’re right, she will come knocking eventually. And I know this because it is what will eventually happen with my own mother. The thing that worries me the most is how it will impact my relationship with my wife. There’s sure to be resentment.

I don’t really tell anyone about how much money I have. Actually, until I stumbled on to MMM earlier this year even I didn’t know how much I have. I realized I needed to figure this out, so made a bigass spreadsheet.

Then, recently, I slipped up. I was talking to someone at work about retiring early. She asked if I had enough money. I chortled and said “oh god yes!” BIG MISTAKE! She’s a blabbermouth. I later heard from someone else that she said I am “loaded”. Now I want to know what she thinks = “loaded”! The person she told is retiring (@62yo) – and we’ve been talking about per tiring. He’s the only person at work that has any idea about how much money I have, he is trustworthy.

I too made the mistake of telling my family how much my pension would be when I hit a certain age. I quote my closest sibling here ” well you have to give that back” .
No more $$ talks , but it was too late. It flew to all members of the family and no one was happy
for me…..just small petty noises.
NEVER tell.